After his first meeting with senior officials at the budget summit, David Cameron has warned there is a "long way to go" to protect Britain's rebate and limit EU spending.

The Prime Minister said the EU's current proposals for spending cuts "do not go far enough", after a meeting this morning with Herman Van Rompuy, the president of the European Council, and José Manuel Barroso, the President of the European Commission.

He also made it clear to the Brussels officials that Britain would not accept any reduction to its £3 billion a year rebate negotiated by Margaret Thatcher to compensate for France's agricultural subsidies.

Diplomats said the key issue for the summit is reconciling Mr Cameron's insistence that the rebate remain unchanged with the French demand to preserve the CAP.

One possible compromise would effectively see money taken from both EU's administration budget and the "Connecting Europe" fund which is meant to pay for new telecoms, transport and energy networks.

The European Commission's administration budget for 2014 - 2020 is currently due to rise from Euro 56 billion to Euro 62.6 billion.

In Brussels, Britain is pushing for a smaller increase in Commission spending, suggesting that savings could be found by reducing the perks of EU staff.

Mr Cameron is understood to have strong support from Germany and the Netherlands for cutting bureaucrats' pay and allowances.

A particular target could be the "expat allowance" paid to non-Belgian staff based in Brussels. It adds 16 per cent to their low tax salaries, and is estimated to cost European taxpayers up to Euro 2 billion.

Mr Cameron believes the retirement age for European civil servants should be raised from 63 to 68 for staff under 58 years old, saving 1.5bn euros (£1.2bn) over the seven years of the proposed budget, a Government spokesman said.

The pay bill should be trimmed by 10 per cent, saving three billion euros (£2.4bn), and pensions should be capped at 60 per cent of final salary, down from 70 per cent - saving of 1.5bn euros (£1.2bn).

A Government spokesman said: ""These are not dramatic changes.

"The Commission (and other institutions) are telling the Greeks, Italians and others that they should put the retirement age up to 68.

"In the UK, we have cut pensions to career-salary average.

"They (Mr Van Rompuy and Mr Barroso) argued it was very difficult legally to change people's terms and conditions (in the EU civil service) - but we have managed it in the UK."

British officials also suggested that cuts could be found in the Connecting Europe fund, which is is due to rise from Euro 8 billion to Euro 36 billion.

British officials suggested that at least Euro 20 billion of that planned increase could be cut.

Cutting the fund could cause a backlash from Baltic states and Finland. It could also prompt accusations that the EU is choosing to spend money cosseting uncompetitive French farmers instead of investing in the infrastructure that could help the European economy compete in the 21st century.

Elio Di Rupo, the Belgian Prime Minister, used his arrival to attack Mr Cameron for his cuts calls.

"We want an ambitious European budget," he said. "It's a shame that for the British, Europe is primarily a single market. For me, for Belgium, Europe is more solidarity and prosperity for all Europeans, so I will plead with somebody such as David Cameron for more an ambitious budget."

However, after his first meeting this morning with Mr Van Rompuy and Mr Barroso, the Prime Minister's office said the current proposals for cutting spending do not go far enough.

"The Prime Minister set out our position that while the latest proposals were a step in the right direction they did not go far enough and that we think more can be done to rein in spending," a Downing Street spokesman said.

"He also set out the UK's position on the rebate that it was fully justified and we did not support any changes.

"It was clear that there was a long way to go before we had a deal that reflected the difficult decisions being taken by member states.

"As the Prime Minister said this morning, we are going to be negotiating very hard for a good deal for Britain’s taxpayers and Europe’s taxpayers and to keep the British rebate."

Mr Van Rompuy is proposing a deal that would cut the overall budget, but reduce the value of Britain’s annual rebate.

However, the Prime Minister has rejected this idea and said it is “quite wrong” for the European Commission to propose increased Brussels budgets at a time of national austerity.

Speaking as he arrived in Brussels this morning, the Prime Minister said: "These are very important negotiations. Clearly at a time when we are making difficult decisions at home over public spending it would be quite wrong - it is quite wrong - for there to be proposals for this increased extra spending in the EU.

"So we are going to be negotiating very hard for a good deal for Britain's taxpayers, for Europe's taxpayers, and to keep the British rebate."

Prime Minister David Cameron speaks with journalists as he arrives for the EU summit at the EU Council building in Brussels (AP)

The Prime Minister has promised to fight "incredibly hard" to protect the rebate worth £3 billion a year to the UK.

He is under intense pressure to get a good settlement or veto the whole deal, as dozens of his own Conservative MPs believe the EU should be spending less.

Bernard Jenkin, a senior backbench Tory, today said the EU budget is the "one of the biggest scandals of public life" as it is open to fraud and bad management.

He told BBC Radio 4's Today Programme that Britain should not be giving any extra cash when the EU's accounts have not been signed off "for 17 years on the trot".

Mr Jenkin also claimed many other countries are threatening to veto the talks and the Prime Minister should not be afraid to walk away.

Mr Cameron has said he ideally wants to see the EU budget cut but will push for the more realistic position of a freeze in the budget in line with inflation.

He will have to fight proposals from the EU for an increase in spending of up to five per cent at the same time as protecting Britain's rebate.

British officials have said that Mr van Rompuy's compromise deal to cut the rebate could mean that UK taxpayers end up contributing up to £6 billion more to the EU, even if its overall budget falls.

Nick Clegg, the deputy Prime Minister, said Mr Cameron's position will be "tough but realistic" and most of the public will think it is "perfectly reasonable" for the EU to tighten its belt.

The EU leaders are trying to agree a seven-year budget starting in 2014 but the negotiations could drag on into next year if no deal can be agreed.

Last night Grant Shapps, the Tory Party chairman said increases in Britain's contributions to the European Union would be "unacceptable".

Mr Shapps said Mr Cameron intended to "freeze, if not cut" Britain's payments to the EU.

In a BBC interview, he suggested the Prime Minister will pursue a deal that reverses Mr Blair's changes and enlarges the rebate. Downing Street declined to repeat Mr Shapps's promise of a reduction in EU payments.